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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Kenya AA who wrote (44188)	1/19/1999 11:26:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Bloomberg, Jan. 19 Internet Prowlers Compaq Computer Corp. is in talks about an Internet transaction, CNBC reported earlier today. Compaq officials weren't immediately available to comment. That could mean that Compaq is interested in buying an Internet search service such as Lycos or Go2Net, said William Blair & Co. analyst Abhishek Gami, who rates Lycos a ''strong buy.'' Compaq owns the Altavista search engine, although it may want to gain an Internet property with bigger name-recognition and more services than Altavista offers, Gami said. Potential acquirers range from any large media company that's lacking a strong Internet business to Microsoft Corp., the world's largest software maker that's been building its Internet services for years, said analysts. Time Warner Inc., Fox Entertainment Group Inc. and CBS Corp. are media companies that might be on the prowl for an Internet purchase, said Needham & Co. analyst Dalton Chandler. Other potential acquirers include German media company Bertelsmann AG and media and entertainment company Sony Corp. Other large media companies are already partnering with Internet companies. Walt Disney Co. agreed to buy 43 percent of No. 4 Internet search directory Infoseek Corp. in June. Last week, the companies unveiled their Go Network Web site to attract more consumers and revenue online. General Electric Co.'s NBC network bought as much as 60 percent of Cnet Inc.'s Snap! Internet search service last year. Still, the media companies might not be willing to pay a premium atop of what many analyst consider overpriced valuations following the surge in shares over the past few months. Lycos, whose stock has increased more than five-fold over the past 12 months, now has a market value of $4.7 billion. That's more than the value of Dow Jones & Co. Inc., the publisher of the Wall Street Journal. One company, though, has keep investor optimism alive with the hope that they might be willing to pay that type of money, said analysts. ''Microsoft, Microsoft, Microsoft,'' said Rick Berry, an analyst at J.P. Turner & Co. in Atlanta.